I recently overheard a conversation in a River Falls, Wisconsin, coffee shop that has stayed with me.
A person was venting to a friend about being forced to use AI—likely Microsoft Copilot—within a work spreadsheet. After several rounds of frustrating trial and error, she eventually gave up and finished the task manually. In the end, the “shortcut” had cost her more time than if she’d just done the work herself from the start.
To many, this sounds like a failure. But I see it as a green flag. It’s a sign that the system is working exactly as it should.
In any automation journey, friction is inevitable. There will always be a point where the technology makes a human slower, not faster. This friction raises a fundamental question: if we increasingly describe workers as merely being “human-in-the-loop,” what is the human actually there for?
The cynical (but correct) answer? Taxes.
Governments are funded by people, not software. Our schools, roads, and healthcare systems rely on the taxation of human income. When a worker is removed from the equation, that tax base vanishes with them. At scale, the “efficiency” of AI creates a massive shortfall in public revenue. The results are predictable: crumbling infrastructure, reduced services, and an even heavier tax burden on the few workers who remain.
I know what the technologists and free-market absolutists will say. I’ve heard the arguments, but they crumble under scrutiny:
“Corporate taxes will cover the gap.”
Argument: If companies replace humans with AI, their profits will skyrocket. We can just tax those profits to fund society.
Reality: Payroll taxes are unavoidable “flow” taxes. Corporate profit taxes are a game of hide-and-seek. Corporations are experts at shifting IP to tax havens, engaging in stock buybacks, and “reinvesting” to show zero profit on paper. You cannot fund a government on the goodwill of creative accountants.
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